Why South Africa is losing out on the tourism boom

City Press – 22 September 2022

 

Empty recliners are seen on the popular Camps Bay beach in Cape Town as numbers of international tourists decline following Covid-19 travel restrictions. The country is simply not doing enough to cash in on tourism dollars. Photo: Reuters

 

Tourism in South Africa only accounts for 3.2% of the country’s GDP. For a country with unique wildlife, white sand beaches and exceptional biodiversity, this is a missed opportunity, experts say.

According to the latest report from the World Tourism Council, South Africa is the third-lowest on a list of 20 countries in terms of travel and tourism’s contribution to the economy. Only South Korea (19th) and Indonesia (20th) rank below South Africa.

In the report, titled Economic Impact 2022: Global Trends, research was conducted among 185 countries and 26 regions in the world to determine to what extent the tourism sector in these countries had recovered from the negative effects of the Covid-19-induced lockdowns and movement restrictions.

In 2020, there were 62 million job losses in the sector worldwide.

There were signs of recovery last year, but it was slower than expected due to sporadic outbreaks of, especially, the Omicron variant of Covid-19.

However, the World Tourism Council is optimistic that, by the end of next year, the sector will be back to 2019’s pre-pandemic levels. The industry is also expected to create 126 million extra jobs by the end of the decade.

In the report, South Africa was singled out as a country where tourism grew by a modest 8.4% last year. This was because of the effect that the Omicron variant and the resulting travel bans in South Africa’s source markets had on foreign tourism in particular.

Income from tourism by local travellers in South Africa increased by 47.2%. In sharp contrast to that, income from international tourists plummeted by more than 40%. The South African tourism sector is expected to do significantly better this year and 37.2% growth is envisaged.

Last week, after the publication of the GDP figures for the second quarter, Hugo Pienaar, chief economist of the Bureau of Economic Research at the University of Stellenbosch, said that more foreign tourists arriving in South Africa should boost economic growth in the second half of the year.

Although this is still lower than before Covid-19, the trend is upwards. A very good summer season is foreseen thanks to accumulated demand for a summer holiday among Europeans who want to travel to warmer climes, Pienaar said.

Recovery in the tourism sector will also benefit employment in the tourism and hospitality industries.

While doing research for her PhD thesis, Sue Snyman, economist and tourism analyst from the University of Cape Town, showed that, for every night a tourist stays in a luxury lodge in the country, 14 people from the surrounding community benefit. Many staff working at lodges send their money home. Additionally, the money circulates in rural communities, helping to grow the local economy.

Tourism is widely seen as a sector that can generate immediate job creation and income. However, there are numerous factors that contribute to South Africa not reaching its potential.

Professor Peet van der Merwe, senior lecturer and researcher of tourism management at North-West University, says it is worrying that tourism’s contribution to the country’s GDP has gradually decreased since 2013 from more than 8% to 6.9% in 2019.

Some of the biggest impediments to inbound tourism are the risks to safety in South Africa, as well as political instability. Foreign tourists are very sensitive to this, he said.

Gilda Swanepoel, tour operator and owner of Eenblond Tours, agrees: 

South Africa has an incredibly negative reputation: crime, the lack of electricity, the looting in July last year. The lack of domestic flights doesn’t help either.

Swanepoel takes foreign tourists on tours of Soweto. The market is recovering, but slowly, she said.

“Last year was a nightmare. At least it’s a little better now. Most of our customers are now Americans, but I miss the busy European, British and Australian tourists from before Covid-19.”

One thing Swanepoel would especially like to see is government helping small tour operators with financing, or a platform for attracting overseas tourists.

Rosemary Anderson, national chair of the tourism body Fedhasa, told City Press that it is encouraging that government said at the recent tourism conference at Sun City in North West that the industry should list their problems and President Cyril Ramaphosa would pay attention to them.

“There is so much goodwill in the tourism sector and we want to be part of the solution,” she said.

However, there are many different obstacles in play, Anderson cautioned.

“The investment environment in South Africa is unstable and this deters investors. In a stable environment, there is the certainty of service delivery: clean streets, effective policing and, of course, water and sanitation – not a situation where raw sewage ends up in our inland dams and rivers and in our oceans.”

Government’s promise that it is working on solutions also remains to be seen – such as the implementation of e-visas and visas for digital nomads who want to live and work in South Africa for a longer period of time. None of this has yet been realised, says Anderson.

Van der Merwe says the shortage of flights worldwide and in South Africa is also hampering tourism.

“There is chaos at many airports overseas. There are also very few direct flights to South Africa now. We are a long-haul destination. Once you’re in the country, it’s cheap, but it’s expensive and difficult to get here.”

South Africa’s flawed public transport system and crumbling infrastructure, such as the poor condition of roads, also deters would-be foreign tourists, according to Van der Merwe.